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Loan Officer Duties and Responsibilities
Institutions that lend money want to make sure they receive it back (with interest, of course). Thus, loan officers must take measures that promote timely repayment. Some of the core actions, as described in job postings, are the following:
Evaluating Applicants People who want to borrow money fill out a variety of paperwork. They include information such as the amount they wish to borrow, the reason for the loan, their current employment status, their income, and references. Loan officers not only look at what's on the forms, they verify it through means such as background checks, credit checks, financial statements, and calls to people listed. Using underwriting software and their own personal judgment, they make decisions on whether or not to approve the loan.
Explaining Terms The loan process can be confusing, so loan officers seek to break information down in ways borrowers can understand. Knowing exact expectations for repayment from the get-go helps people make better decisions about whether they should take out a loan, the amount of money, and the time period in which to pay it back.
Seeking Clients Issuing loans enables an institution to make money because the initial sum gets paid back with interest. Loan officers often look for good candidates for loans and talk to them about the possibilities, such as taking out money to make home repairs or to go on a once-in-a-lifetime vacation. In this respect, loan officers act much like marketers and salespeople.
Working with Others Loan officers may need to consult others when putting together loans. For instance, a start-up business may request a loan that is too large a risk for a single bank but may be able to be shared among multiple lending institutions. At a car dealership, loan officers may work closely with the sales team to create monetary deals and packages.
Loan Officer SkillsMath skills are essential to loan officers since they deal with sums and interest rates on a daily basis. Loan officers also need to be excellent communicators because they are responsible for thoroughly explaining loans to those who seek them. Other admirable skills for loan officers to possess include:
- Paying attention to details so that everything written in the loan contract is correct
- Acting and looking professional to build trust with clients and reflect positively on the employer
- Exhibiting patience and good interpersonal skills because clients can be nervous and confused when making the major decision to take out a loan
- Analyzing multiple sources to make sound decisions
Loan Officer Education and TrainingLoan officers tend to hold a bachelor's degree, usually in a field such as business, economics, or finance. Another route is some post-secondary coursework combined with many years of work experience in banking, sales, or customer service. All new hires should expect a period of formal training as well as learning on the job. Certification can enhance job prospects for potential loan officers, and those dealing with mortgage loans must become licensed in their state.
Loan Officer SalaryThe median annual salary for loan officers is $63,650. Loan officers in the 10th percentile earn about $32,800 a year, and the highest paid make in excess of $132,200 a year. Loan officers in New York, the District of Columbia, and Massachusetts make the highest median salaries in the U.S. - $79,660, $76,900, and $75,670, respectively. Some loan officers receive commissions or bonuses for bringing in new clients or building a record of well-performing loans.
Loan Officer Resources
As you contemplate becoming a loan officer, the following can be great places to turn to for answers to your questions:
American Bankers Association - This trade organization represents banks of all sizes and offers a wealth of information on the banking industry, as well as continuing education and training.
Mortgage Bankers Association - A leading voice in real estate finance, this organization is a go-to place for loan officers interested in handling mortgages.
Nationwide Multistate Licensing System Resource Center - Interested in getting licensed as a mortgage loan officer? This website contains both general guidelines and state-by-state requirements.
The 2016 Loan Officer's Practical Guide to Residential Finance - This thorough reference acts as a primer for new loan officers and others interested in how the mortgage process works.
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